XPEL Reports Revenue of $107.5 million in Fourth Quarter 2024

Rhea-AI Summary

XPEL reported Q4 2024 financial results with revenue increasing 1.9% to $107.5 million. Excluding China impacts, revenue grew 10.5%. The company achieved a gross margin of 40.6%, while experiencing a foreign exchange loss of $1.2 million due to USD strengthening.

Q4 net income decreased 25.7% to $8.9 million ($0.32 per share) compared to $12.0 million ($0.43 per share) in Q4 2023. EBITDA declined 19.3% to $14.3 million. For full-year 2024, revenue grew 6.1% to $420.4 million with net income of $45.5 million ($1.65 per share).

Notable performance metrics include: US revenue up 6.2%, window film revenue increased 32.9%, and total installation revenue grew 16.1%. The company projects Q1 2025 revenue of $97-99 million and has implemented a workforce reduction expected to save $2 million annually.

Positive

• Revenue grew 10.5% excluding China impacts
• Window film revenue surged 32.9% YoY
• Gross margin improved to 40.6% from 38.8% YoY
• US revenue increased 6.2%
• Installation revenue grew 16.1%
• $2M annual cost savings expected from workforce reduction

Negative

• Overall revenue growth to 1.9% in Q4
• Net income declined 25.7% to $8.9M
• EBITDA decreased 19.3% to $14.3M
• $1.2M foreign exchange loss incurred
• Operating expenses increased 17.4%

Insights

Financial Analyst

XPEL's Q4 2024 results present a tale of geographical divergence and margin improvement amid profitability challenges. While overall revenue grew modestly at 1.9% to $107.5 million, the 10.5% growth excluding China reveals significant regional performance disparities. The US market showed healthy 6.2% growth, with other international markets (excluding China) surging 17.7%, indicating strong global demand for XPEL's protective films and coatings outside China.

The window film segment emerged as a standout performer with 32.9% YoY growth, now representing 17.2% of total revenue. This diversification beyond their core automotive protection films appears to be gaining meaningful traction. Similarly, installation services grew 16.1% YoY, suggesting successful vertical integration in their business model.

Despite these positive trends, profitability metrics declined substantially. EBITDA fell 19.3% to $14.3 million (representing 13.3% of revenue vs. 16.7% in Q4 2023), while net income dropped 25.7% to $8.9 million. A $1.2 million foreign exchange loss partially explains this decline, but the 17.4% increase in operating expenses significantly outpacing revenue growth indicates concerning cost structure challenges.

The recently announced workforce reduction targeting $2 million in annual savings suggests management recognizes these efficiency issues. With Q1 2025 revenue guidance of $97-99 million and cash flow from operations at just $6.3 million in Q4, XPEL appears to be prioritizing operational efficiency while continuing strategic initiatives in dealership channels and acquisitions. The gross margin improvement to 40.6% (from 38.8%) represents a positive development that could help offset some profitability pressures if sustained.

SAN ANTONIO--(BUSINESS WIRE)-- XPEL, Inc. (Nasdaq: XPEL) (the “Company”), a global provider of protective films and coatings, announced consolidated results¹ for the fourth quarter and year end 2024.

Fourth Quarter 2024 Overview:

• Revenue increased 1.9% to $107.5 million in the fourth quarter of 2024. Excluding China impacts, revenue increased 10.5% in the fourth quarter 2024.

• Gross margin of 40.6% in the fourth quarter of 2024.

• Foreign exchange loss (“FX Loss”) of $1.2 million incurred in the fourth quarter 2024 due to the strengthening of the US dollar.

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased 19.3% to $14.3 million, or 13.3% of revenue, compared to $17.7 million, or 16.7% of revenue in the fourth quarter of 2023. Normalizing for the FX impact, EBITDA would have decreased 9.0% and EBITDA margin would have been 14.3%. ²

• Net income decreased 25.7% to $8.9 million, or $0.32 per basic and diluted share, versus net income of $12.0 million, or $0.43 per basic and diluted share in the fourth quarter of 2023. Normalizing for the FX impact, net income would have decreased 13.8% and EPS would have been $0.35 per share.

Year End 2024 Overview:

• Revenue increased 6.1% to $420.4 million compared to prior year.

• Gross margin of 42.2% in 2024.

• Net income of $45.5 million, or $1.65 per basic and diluted share, versus net income of $52.8 million, or $1.91 per basic and diluted share in 2023.

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $69.5 million, or 16.5% of revenue, compared to $76.9 million, or 19.4% of revenue in 2023.²

Ryan Pape, President and Chief Executive Officer of XPEL, commented, “We saw solid top line performance in the fourth quarter and made great progress in many of our key initiatives during the year including increasing our focus on dealerships, refining our go-to-market strategy in China and executing on our acquisition strategy. The Company is well-positioned to continue to build on this momentum in 2025.”

Financial Highlights for the Fourth Quarter 2024:

Summary consolidated financial information for the fourth quarter 2024 and 2023 (unaudited, dollars in thousands):

	Three Months Ended December 31,													% Change
	2024			% of Total Revenue			2023				% of Total Revenue			2024 vs. 2023
Total revenue	$	107,527		100.0	%		$	105,538			100.0	%		1.9	%
Gross margin		43,703		40.6	%			40,932			38.8	%		6.8	%
Operating Expenses		31,358		29.2	%			26,708			25.3	%		17.4	%
Net income		8,898		8.3	%			11,970			11.3	%		(25.7	)%
EBITDA2		14,250		13.3	%			17,654			16.7	%		(19.3	)%
Net cash provided by (used in) operating activities	$	6,327		n/a			$	(1,117	)		n/a			n/a

Geographical Revenue Summary

	Three Months Ended December 31,						% Change			% of Total Revenue
		2024			2023		Inc (Dec)			2024			2023
United States	$	59,054		$	55,611		6.2	%		54.9	%		52.7	%
Canada		13,370			11,592		15.3	%		12.4	%		11.0	%
China		9,238			16,584		(44.3	)%		8.6	%		15.7	%
Continental Europe		8,935			8,529		4.8	%		8.3	%		8.1	%
United Kingdom		3,881			3,218		20.6	%		3.6	%		3.0	%
Middle East/Africa		5,656			4,958		14.1	%		5.3	%		4.7	%
Asia Pacific		4,646			2,751		68.9	%		4.3	%		2.6	%
Latin America		2,747			2,120		29.6	%		2.6	%		2.0	%
Other		—			175		(100.0	)%		0.0	%		0.2	%
Total	$	107,527		$	105,538		1.9	%		100.0	%		100.0	%

Overall Revenue

• Total revenue grew 1.9% compared to fourth quarter 2023 (“YoY”). Excluding China impacts, total revenue increased 10.5% YoY.

• US revenue increased 6.2% YoY.

• All other revenue (excluding US and China) grew 17.7% YoY.

Product and Service Revenue

• Total product revenue was flat YoY. Excluding China impacts, total product revenue increased 10.9% YoY.

• Total window film revenue increased 32.9% YoY and represented 17.2% of total revenue.

• Total service revenue increased 9.4% YoY.

• Total installation revenue (labor and product combined) grew 16.1% YoY. Organic total installation revenue grew 8.0% YoY.

• Adjusted product revenue (combining cutbank credits revenue and product revenue) declined 1.0% YoY. Excluding China, adjusted product revenue grew 9.3% YoY.

Other Financial Information

• Gross margin percentage was 40.6% and 38.8% in the fourth quarter of 2024 and 2023, respectively.

• Total operating expenses increased 17.4% YoY.

• Sales and marketing expenses increased 24.6% YoY and represented 10.7% of revenue.

• General and administrative expenses increased 13.6% YoY and represented 18.5% of revenue.

• Net income decreased 25.7% YoY.

• EBITDA decreased 19.3% YoY².

Cash Flows from Operations

• Cash flows provided by operations were $6.3 million in the fourth quarter 2024.

2025 First Quarter Outlook

• The Company expects first quarter 2025 revenue of approximately $97 - $99 million.

• The Company recently completed a workforce reduction that is expected to yield approximately $2 million in annual run rate savings.

Please see the information under “Forward-looking Statements” below regarding certain cautionary statements relating to our 2025 First Quarter Outlook.

Conference Call Information

The Company will host a conference call and webcast today, February 26, 2025 at 11:00 a.m. Eastern Time to discuss the Company’s fourth quarter and annual 2024 results.

To access the live webcast, please visit the XPEL, Inc. website at www.xpel.com/events-presentations.

To participate in the call by phone, dial (877) 545-0523 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0016. Callers should use access code: 186072.

A replay of the teleconference will be available until March 28, 2025 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 51876.

About XPEL, Inc.

XPEL is a leading provider of protective films and coatings, including automotive paint protection film, surface protection film, automotive and architectural window films, and ceramic coatings. With a global footprint, a network of trained installers and proprietary DAP software, XPEL is dedicated to exceeding customer expectations by providing high-quality products, leading customer service, expert technical support and world-class training. XPEL, Inc. is publicly traded on Nasdaq under the symbol “XPEL”.

¹ The results summarized above for 2024 are preliminary and unaudited. As the Company completes its quarter-end financial close processes and finalizes its financial statements for the fourth quarter and year end of 2024, it is possible that the Company may identify items that require it to make adjustments to the preliminary information set forth above, and those adjustments could be material. Full year end 2024 financial information will be included in the filing of the Company’s Annual Report on Form 10-K with the Securities and Exchange Commission which is anticipated on or prior to February 28, 2025.

² See “Non-GAAP Financial Measure” and “Reconciliation of Non-GAAP Financial Measure” below.

Forward-looking Statements

This release includes forward-looking statements (within the meaning of Section 27A of the Securities act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended) regarding XPEL, Inc. and its business, which may include, but is not limited to, anticipated use of proceeds from capital transactions, expansion into new markets, execution of the company's growth strategy and outlook. Often, but not always, forward-looking statements can be identified by the use of words such as “plans,” “is expected,” “expects,” “scheduled,” “intends,” “contemplates,” “anticipates,” “believes,” “proposes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations and assumptions of the management of XPEL. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, a prolonged or material contraction in automotive sales and production volumes, disruption in our supply chain, technology that could render our products obsolete, changes in the way vehicles are sold, damage to our brand and reputation, cyber events and other legal and regulatory developments. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Report on Form 10-K. Although XPEL has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and XPEL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measure

To aid in the understanding of XPEL's ongoing business performance, XPEL uses EBITDA, a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of XPEL's financial performance under GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly title measures. For a full reconciliation of EBITDA to comparable GAAP measure, refer to the reconciliation titled “Reconciliation of Non-GAAP Financial Measure.”

XPEL, Inc. Consolidated Statements of Income (Unaudited) (In thousands except per share data)
	Three Months Ended December 31,							Year Ended December 31,
	(Unaudited)			(Unaudited)				(Unaudited)
	2024			2023				2024			2023
Revenue
Product revenue	$	81,847		$	82,067			$	318,849		$	311,406
Service revenue		25,680			23,471				101,551			84,887
Total revenue		107,527			105,538				420,400			396,293
Cost of Sales
Cost of product sales		52,415			54,395				199,791			198,008
Cost of service		11,409			10,211				43,249			35,871
Total cost of sales		63,824			64,606				243,040			233,879
Gross Margin		43,703			40,932				177,360			162,414
Operating Expenses
Sales and marketing		11,509			9,234				42,817			31,788
General and administrative		19,849			17,474				75,396			63,654
Total operating expenses		31,358			26,708				118,213			95,442
Operating Income		12,345			14,224				59,147			66,972
Interest expense		34			301				996			1,248
Foreign currency exchange loss (gain)		1,157			(726	)			1,373			(307	)
Income before income taxes		11,154			14,649				56,778			66,031
Income tax expense		2,256			2,679				11,289			13,231
Net income	$	8,898		$	11,970			$	45,489		$	52,800
Earnings per share
Basic	$	0.32		$	0.43			$	1.65		$	1.91
Diluted	$	0.32		$	0.43			$	1.65		$	1.91
Weighted Average Number of Common Shares
Basic		27,649			27,629				27,639			27,622
Diluted		27,656			27,633				27,643			27,634

XPEL, Inc. Consolidated Balance Sheets (In thousands except share and per share data)
	(Unaudited) 12/31/2024				December 31, 2023
Assets
Current
Cash and cash equivalents	$	22,087			$	11,609
Accounts receivable, net		29,146				24,111
Inventory, net		110,904				106,509
Prepaid expenses and other current assets		5,314				3,529
Income tax receivable		893				696
Total current assets		168,344				146,454
Property and equipment, net		17,735				16,980
Right-of-use lease assets		19,490				15,459
Intangible assets, net		34,562				34,905
Other non-current assets		1,350				782
Goodwill		44,126				37,461
Total assets	$	285,607			$	252,041
Liabilities
Current
Current portion of notes payable	$	63			$	62
Current portion of lease liabilities		4,666				3,966
Accounts payable and accrued liabilities		36,789				32,444
Total current liabilities		41,518				36,472
Deferred tax liability, net		469				2,658
Other long-term liabilities		1,810				890
Borrowings on line of credit		—				19,000
Non-current portion of lease liabilities		16,126				12,715
Non-current portion of notes payable		229				317
Total liabilities		60,152				72,052
Stockholders’ equity
Preferred stock, $0.001 par value; authorized 10,000,000; none issued and outstanding		—				—
Common stock, $0.001 par value; 100,000,000 shares authorized; 27,651,773 and 27,630,025 issued and outstanding, respectively		28				28
Additional paid-in-capital		15,550				12,546
Accumulated other comprehensive loss		(4,236	)			(1,209	)
Retained earnings		214,113				168,624
Total stockholders’ equity		225,455				179,989
Total liabilities and stockholders’ equity	$	285,607			$	252,041

XPEL, Inc. Consolidated Statements of Cash Flows (Unaudited) (In thousands)
	Three Months ended December 31,								Year Ended December 31,
	(Unaudited)				(Unaudited)				(Unaudited)
	2024				2023				2024				2023
Cash flows from operating activities
Net income	$	8,898			$	11,970			$	45,489			$	52,800
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment		1,512				1,305				5,820				4,534
Amortization of intangible assets		1,550				1,399				5,877				5,059
Gain on sale of property and equipment		(14	)			(2	)			(49	)			(13	)
Stock compensation		868				496				3,197				1,640
Provision for credit losses		111				27				390				243
Deferred income tax		(1,367	)			(77	)			(2,781	)			(921	)
Changes in assets and liabilities:
Accounts receivable, net		(129	)			2,483				(5,604	)			(7,000	)
Inventory, net		(9,959	)			(13,260	)			(4,785	)			(24,843	)
Prepaid expenses and other assets		631				7,892				(2,154	)			604
Income tax receivable or payable		(637	)			(1,517	)			(267	)			(1,197	)
Accounts payable and accrued liabilities		4,863				(11,833	)			2,691				6,478
Net cash provided by (used in) operating activities		6,327				(1,117	)			47,824				37,384
Cash flows used in investing activities
Purchase of property, plant and equipment		(1,628	)			(1,615	)			(6,713	)			(6,356	)
Proceeds from sale of property and equipment		—				9				40				29
Acquisitions, net of cash acquired, payment holdbacks, and notes payable		(3,335	)			(14,038	)			(9,855	)			(18,735	)
Development or purchase of intangible assets		(455	)			(493	)			(1,876	)			(1,291	)
Net cash used in investing activities		(5,418	)			(16,137	)			(18,404	)			(26,353	)
Cash flows from financing activities
Net borrowings (payments) on revolving credit agreements		—				19,000				(19,000	)			(7,000	)
Restricted stock withholding taxes paid in lieu of issued shares		(18	)			—				(193	)			(167	)
Repayments of notes payable		(16	)			(15	)			(60	)			(92	)
Net cash (used in) provided by financing activities		(34	)			18,985				(19,253	)			(7,259	)
Net change in cash and cash equivalents		875				1,731				10,167				3,772
Foreign exchange impact on cash and cash equivalents		226				(496	)			311				(219	)
Increase in cash and cash equivalents during the period		1,101				1,235				10,478				3,553
Cash and cash equivalents at beginning of year		20,986				10,374				11,609				8,056
Cash and cash equivalents at end of year	$	22,087			$	11,609			$	22,087			$	11,609
Supplemental schedule of non-cash activities
Contingent consideration	$	1,600			$	—			$	1,600			$	—
Non-cash lease financing	$	2,491			$	2,384			$	8,701			$	4,231
Issuance of common stock for vested restricted stock units	$	210			$	327			$	1,110			$	1,038
Supplemental cash flow information
Cash paid for income taxes	$	3,361			$	4,149			$	13,617			$	15,293
Cash paid for interest	$	31			$	240			$	1,026			$	1,240

Reconciliation of Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure. EBITDA is defined as net income (loss) plus interest expense, net, plus income tax expense plus depreciation expense and amortization expense. EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. It is not a measurement of our financial performance under GAAP and should not be considered as alternatives to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other businesses. EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP.

EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of ongoing operations and other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

EBITDA Reconciliation (in thousands)
	Three Months Ended December 31,						Year Ended December 31,
	(Unaudited)			(Unaudited)			(Unaudited)
	2024			2023			2024			2023
Net Income	$	8,898		$	11,970		$	45,489		$	52,800
Interest		34			301			996			1,248
Taxes		2,256			2,679			11,289			13,231
Depreciation		1,512			1,305			5,820			4,534
Amortization		1,550			1,399			5,877			5,059
EBITDA	$	14,250		$	17,654		$	69,471		$	76,872

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226143725/en/

For more information, contact:

Investor Relations:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

Phone: (203) 972-9200

Email: xpel@imsinvestorrelations.com

Source: XPEL, Inc.

FAQ

What was XPEL's revenue growth in Q4 2024 excluding China impacts?

XPEL's revenue grew 10.5% in Q4 2024 when excluding China impacts, compared to overall growth of 1.9%.

How much did XPEL's window film revenue increase in Q4 2024?

Window film revenue increased 32.9% year-over-year, representing 17.2% of total revenue.

What is XPEL's revenue guidance for Q1 2025?

XPEL expects Q1 2025 revenue to be approximately $97-99 million.

How much annual savings is XPEL expecting from its recent workforce reduction?

XPEL expects approximately $2 million in annual run rate savings from the workforce reduction.

What was XPEL's gross margin in Q4 2024 compared to Q4 2023?

Gross margin was 40.6% in Q4 2024, up from 38.8% in Q4 2023.